SEC issues new SPAC regulations to strengthen investor protection-中小企业海外上市资本集团 SME Overseas IPO Capital Group

SEC issues new SPAC regulations to strengthen investor protection

作者：管理员发布于：2024-09-04 11:11:25 文字：【大】【中】【小】

摘要：On January 24, 2024, the US Securities and Exchange Commission (SEC) passed the SPAC regulatory regulations with a 3:2 vote. The new SPAC regulations will further promote the development and regulation of SPAC listings.

The SPAC listing model can be traced back to the 1990s, originating from the Toronto Stock Exchange in Canada. In 1993, GKN Securities (predecessor of EarlyBird Capital) introduced it to the market and it was fully legalized by 2003. In 2008, the SPAC listing system was adjusted from being limited to OTC listings to being directly listed on the main board of the New York Stock Exchange or Nasdaq.

During 2020-2022, the number of SPACs will account for more than 50% of the total number of U.S. IPOs. In 2023, under the general environment of the COVID-19 with long-term impact, intensified geopolitical conflicts, complex and volatile international situation, and high inflation faced by many countries, the proportion will still be as high as 43%. It is sufficient to indicate that SPAC has been favored by many prospective public companies and investors in the US capital market.

However, in the past, SPAC has often been controversial due to its highly flexible and free mode characteristics. In response to market demand, the SEC issued multiple new regulations and bills between 2020 and 2021, and in March 2022, issued a draft to strengthen SPAC regulation. The new regulations for SPAC this time are based on the "regulatory draft" and were introduced after soliciting opinions from various parties in the market over the past two years, aiming to enhance the supervision of SPAC trading and further protect the interests of investors.

The US Securities and Exchange Commission (SEC) passed new rules and amendments on January 24, 2024, to strengthen disclosure of SPAC IPOs and subsequent business merger transactions between SPACs and target companies. (hereinafter referred to as "SPAC New Regulations")

SEC Chairman Gary Gensler said, "Today's passage will help ensure that the rules of SPACs are largely consistent with those of traditional IPOs, strengthening investor protection through three aspects: disclosure, forecasting, and issuer obligations. In summary, these measures will help protect investors by addressing information asymmetry, misleading information, and conflicts of interest in SPACs and SPAC M&A transactions.

The new rules and revisions require, among other things, strengthened disclosure of conflicts of interest, SPAC sponsor compensation, dilution, and other important information for investors in SPAC IPOs and SPAC M&A transactions. The rule also requires registrants to provide investors with additional information about the target company, which will help investors make more informed voting and investment decisions in SPAC M&A transactions.

The adopted version will be published on the official website of the US Securities and Exchange Commission (www.sec. gov) and will be published in the Federal Register, taking effect 125 days after publication.

The "SPAC New Regulations" issued by the SEC require companies, SPAC initiators, and investors planning to go public through de SPAC trading to closely monitor and comply with them to ensure the smooth completion of SPAC mergers and listings. As rules become increasingly standardized, companies need to pay more attention to improving the rigor and compliance of their various data disclosures.

Due to the popularity and market attention of the SPAC model, the SEC also needs to continuously introduce laws and regulations on the SPAC listing mechanism to respond to market demand. These new regulations can enhance the standardization of the capital market environment, making investors more stable and attracting more high-quality investors, thereby forming a virtuous cycle of the SPAC market ecosystem and promoting the healthy development of the SPAC market.

In an increasingly standardized and transparent capital market environment, if companies want to merge and go public with more suitable SPAC shell companies, they need more professional, high-quality, and channel rich listing coaching institutions.

Small and medium-sized enterprises' overseas listed capital groups have their own, readily available and sufficient SPAC resources, which can better assist enterprises in smoothly going public in the United States. We have been using SPAC, a reverse merger model, since 2009 to help small and medium-sized enterprises go public in the United States. We have been deeply cultivating with a professional, focused, and persistent attitude. We look forward to helping more small and medium-sized enterprises successfully go public in the United States!

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